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Budget 2018: business round-up

Business was arguably the main focus of the Chancellor’s Budget announcements on 29 October 2018, with a series of measures targeted at supporting high streets, entrepreneurs and growing firms.

While this was good news for the businesses concerned, contractors and landlords saw some less welcome changes.

The roll-out of controversial off-payroll working rules in the private sector was confirmed, and restrictions to lettings relief were put in place.

To help you find out how you’re affected by the changes, we’ve put together a summary of the main changes for businesses in Budget 2018.

Business rates

Cafes, pubs and shops on the high street were given a boost in this year’s Budget, as business rates were cut by a third for retail properties with a rateable value below £51,000. This takes effect from April 2019, and is set to remain in place for at least two years.

Annual investment allowance

The annual investment allowance, which allows businesses to deduct the cost of qualifying plant and machinery from their profits before tax, will temporarily increase to £1 million from January 2019 to January 2021.

VAT threshold

In Autumn Budget 2017, the VAT threshold was frozen at £85,000 until April 2020. Budget 2018 extended that for a further two years, until April 2022.

IR35 in the private sector

Following a consultation, reforms to IR35 will be extended to the private sector, meaning contractors could see a higher tax bill if they fall within the legislation.

The responsibility for determining the worker’s employment status under IR35 will move to the firm engaging them.

However, these won’t take effect until 2020, and won’t include smaller firms.

Apprenticeships

After calls for reform to the apprenticeship levy, the Government has announced a series of measures to “strengthen the role of employers” in the programme.

Small firms that don’t pay the levy have to make a co-investment towards training – this was halved, from 10% to 5%.

Private residence relief

From April 2020, lettings relief will only apply to property owners who are in shared occupancy with a tenant.

Making Tax Digital

There was no mention of any changes to Making Tax Digital in the Budget speech.

If all goes to plan, this should mean the scheme is set to begin for VAT from 1 April 2019, as previously announced.

Contact us

To find out more about the measures announced in the Budget, and how they could affect your business, contact us at tracya@knightandcompany.co.uk or call 01628 631 056.

You can also read our full Budget coverage here.